Skf USA Inc. v. United States
2011 WL 4565757
Ct. Intl. Trade2011Background
- SKF plaintiffs challenge Commerce Final Results in the 19th administrative reviews of ball bearings products for 2007-2008.
- Primary challenges include CEP profit deduction, home-market freight/packing offsets, Stonehouse packing allocation, and the zeroing methodology.
- Plaintiffs also challenge Commerce's 15-day liquidation rule as unlawful under the APA and statutory scheme.
- Court granted preliminary injunction regarding liquidation; this action seeks judgment on the agency record and remand.
- Commerce must address the zeroing methodology on remand and provide explanation consistent with Federal Circuit guidance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CEP profit deduction legality | SKF Italy/SNFA profits deducted unlawfully. | Statute requires deduction of profit allocated to selling expenses in the U.S. | Deduction of CEP profit supported by statute. |
| Home-market freight/packing offset methodology | Offsets should be capped to correspond to specific categories with revenues; aggregate method distortive. | Aggregate offsets permitted; statute silent on offset method; no abuse shown. | Aggregate offset method reasonable and lawful. |
| Stonehouse packing expense allocation | Weight-based reallocation deviates from SKF UK's method and may distort. | Weight-based allocation avoids distortions from value-based method. | Weight-based allocation in remand is permissible; not unlawful. |
| Zeroing methodology in administrative reviews | Zeroing inconsistent with law and international obligations; should be remanded. | Federal Circuit precedent supports zeroing; many cases upheld. | Remand required to explain Dongbu/JTEKT interpretation; zeroing unresolved. |
| 14- to 15-day liquidation rule | Policy inadequately weighs factors affecting judicial review; unlawful as applied. | Policy provides reasonable opportunity for review. | Declaratory judgment that the 15-day rule is unlawful as applied; remand ordered. |
Key Cases Cited
- JTEKT Corp. v. United States, 642 F.3d 1378 (Fed. Cir. 2011) (require explanation for differing zeroing interpretations between investigations and reviews)
- Dongbu Steel Co. v. United States, 635 F.3d 1363 (Fed. Cir. 2011) (statutory language on zeroing requires explanation for inconsistent interpretations)
- Koyo Seiko Co. v. United States, 551 F.3d 1286 (Fed. Cir. 2008) (upholding zeroing in certain contexts; later developments questioned)
- SKF USA Inc. v. United States, 630 F.3d 1365 (Fed. Cir. 2011) (affirmed zeroing methodology in prior context; later cases call for remand)